Tuesday, June 21, 2016

In my previous post I referred to Ned Davis Research who
deems that “aBear Market requires a 30%
drop in the Dow Jones Industrial Average after 50 calendar days or a 13%
decline after 145 calendar days.” Also according to Ned Davis Research during a
study period from January 2, 1900 through December 31, 2010, (over 100 years) big
corrections in the Dow Jones Industrial Average are actually quite rare.

Dips of 5 % or more totalled 378 or 3.4 per year

Corrections of 10 % or more was 122 or about 1 per
year

Bear declines of 20 % or more was 32 or about I every
3.5 years

The business media claim that a decline of 20% puts
the market into “bear territory.”

At Getting Technical our historical market studies
dictate that bear market prints a lower low within a rolling 26 to 30 week time
window. In other words – in order to be a bear, a broad stock index
like the S&p500 must print a lower low within a rolling six month window – if not –
then it is a bull. The S&P500 from late 2012 through June 2016 charted bear
is based on a simple 26 week price channel and note the 2 downward violations
of Aug 22, 2015 and finally on Jan 22, 2016 – we are now past the 6-month
window and so if not a bear then it’s a bull..

Wednesday, June 15, 2016

Ned Davis Research deems that “a Bear Market requires a 30% drop in the Dow
Jones Industrial Average after 50 calendar days or a 13% decline after 145
calendar days.”

Also according to Ned Davis Research during a study
period from January 2, 1900 through December 31, 2010, (over 100 years) big
corrections in the Dow Jones Industrial Average are actually quite rare.

Dips of 5 % or more totalled 378 or 3.4 per year

Corrections of 10 % or more was 122 or about 1 per
year

Bear declines of 20 % or more was 32 or about I every
3.5 years

The business media claim that a decline of 20% puts
the market into “bear territory.”

At Getting Technical our historical market studies
dictate that bear market prints a lower low within a rolling 26 to 30 week time
window. In other words – in order to be a bear, a broad stock index
like the TSX Composite must print a lower low within a rolling six month window – if not –
then it is a bull.

The TSX late 2014 through 2015 charted bear is based
on a simple 26 week price channel

Thursday, June 2, 2016

The changing components of the Dow Jones Industrial
Average (DJII) reflect the gradual transition of America
yesterday to America
today. Years ago – back in the 1980’s investors enjoyed the returns of the Dow Jones Industrial Average
which ran from about 800 to over 3000 in ten years – a triple.

Back then the Dow was truly “industrial”
with eighteen industrial
relater components. There were only six consumer related components with the
rest being energy, financial and IBM or “big blue”. Those were the days when the
Dow components employed people who made stuff - Allied Chemical, Aluminum
Company of America, American
Can, Bethlehem Steel, Du Pont, Eastman Kodak
Company, General Electric Company, General Motors Corporation and Goodyear –
just to name a few of the employers.

Today the Dow is no longer “industrial: with only six
industrial manes and twelve consumer names. So instead of working at Goodyear
and Union Carbide the jobs go to McDonald's Corp and Wal-Mart Stores Inc.

Yes today’s Dow is populated by companies that sell
stuff to Americans that was made somewhere else. We can go to Dow components
Wal-Mart, grab a Coke and burger at McDonalds, pick up a Disney movie, get a
cell phone plan from Verizon Communications Inc. and use our Visa Inc. credit
card. We could also run our American Express Company card at The Home Depot,
Inc to cover the purchase of Asian flooring. And yes you could look for shoes
from Nike, Inc while you’re out there.

About Me

Bill has been writing a weekly business column in the Toronto Star since 1997, and was an early contributor to the former “Report on Business Television”. He has founded the Getting Technical Market Newsletter in December 1998.
Bill is also an Instructor for the Canadian Securities Institute. He is also a contributing author of the textbook for the technical analysis course offered by the Canadian Securities Institute (CSI. He is also called upon to provide training to industry professionals on technical analysis at many of Canada’s leading brokerage firms.
In February 2010 Bill became a technical sub-advisor to Stonebrooke Asset Management Ltd. who manages the Hybrid Investment Program under the Elite Wealth Strategies program for Union Securities Ltd..
The relationship ended in Feb 2012 but over the 24 month period the Hybrid Program enjoyed five technical selections that were the subject of takeover bids namely, Gerdau Ameristeel, El Paso Corp, Biovail Corp. Viterra Inc. and ShawCor Ltd